Is bank liable if client is robbed in branch?

Can a bank be held liable if a customer is robbed inside the bank premises, but before he has deposited cash with the cashier? The National Consumer Disputes Redressal Commission (NCDRC) has delivered conflicting verdicts.

In a recent judgment NCDRC ruled that a bank’s security guard is under no obligation to provide security to account holders, and therefore, the bank cannot be forced to compensate a customer whose money has been snatched by someone in the bank. This is in conflict with NCDRC’s own 2005 judgement, in which it held that any security lapse in a bank would amount to “deficiency in service” under the Consumer Protection Act and that the bank would have to compensate the customer.

Experts said the Supreme Court will now have to decide which precedent is legally tenable.

In the recent case, a bench headed by justice KS Chaudhari ruled that the bank’s security guard is not under any obligation to provide security to an account holder. “If a customer is assaulted by another customer inside the bank, we do not think that the bank or its security guard can be held responsible,” the bench said.

It disagreed with Haryana State Consumer Disputes Redressal Commission, Panchkula that had directed State Bank of Patiala to pay Rs. 25,000 to one of its customers, Krishan Kaul, who was robbed while the bank guard was watching a procession outside.

The bench ruled that the money in Kaul’s hands was not the bank’s property till it was handed over to the cashier.

Supreme Court advocate Aysweria Bhatti said the judgement defies common logic. “A bank cannot be equated with a grocery shop, because people go to the bank to transact valuables. It is the responsibility of the bank once customers are inside. The bank must ensure the valuables they come with are transacted safely.”